What Happens to Your Property and Debt?
Madeleine Alberts, Children, Youth and Family Program Leader; M. Kathleen Mangum, Sandra Syverson, Barbara Radke, and Minnell Tralle, Extension Educators — Family Resiliency
One of the many decisions you'll need to make during your family transition is what happens to your property and debt. The easiest way to deal with property division during a legal dissolution is for you and the other parent to decide how to divide the property yourselves. However, because most couples aren't able to amicably decide how to deal with property division issues, the matter usually ends up in court.
There are two basic ways to handle property division.
- Community property states — All property is divided evenly, and separate property is kept by its owner. This includes all property accumulated during the legal relationship, including debts, unless the property or debt is designated otherwise (e.g., a loan made out specifically to one person based on his/her separate property).
- Equitable distribution states — A judge decides what is equitable, or fair, rather than simply splitting the property in two. In practice, this may mean that two-thirds of the property goes to the higher earning spouse/partner, with the other spouse getting one-third.
Note that when courts divide marital property, that does not necessarily mean the property is literally and physically split. A court will usually add up the total value of the marital estate and grant each spouse/partner a percentage.
Bean, P. (2008). "I due" characterizing debt in marriage dissolution. Bench & Bar of Minnesota, 65(3).
Minnesota Judicial Branch. (n.d.). Common questions about real estate and divorce.
Minnesota Judicial Branch. (n.d.) What to expect: Divorce in Minnesota.
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